JYSK Group with stores in Scandinavia, Central Europe, the Netherlands and the UK. This report covers 11 of the 32 countries in which JYSK is currently represented. This annual report does not cover JYSK companies such as Danisches Bettenlager in Germany and Austria or JYSK in Switzerland and France. JYSK Franchise and other companies in JYSK Holding A/S have also not been included. We have given this Annual Report the title ”Forward – together”.
This is partly because our expansion is continuing and partly because one of our great strengths is our esprit de corps and sense of community among JYSK’s 14,000 employees. A strong sense of community and professional advice for our customers was our basic philosophy when the first JYSK store opened on Silkeborgvej in Aarhus almost 30 years ago. This is still our philosophy today – and it will be in the future. Happy reading! Lars Larsen Chairman of the Board Jan Bogh Managing Director Lars Larsen opened his first store in 1979. JYSK is now an international group with approximately 1,450 stores in 32 countries and more than 14,000 employees.
JYSK wants to offer everyone a great bargain and has ambitions to open shops across the world. The group is owned by Lars Larsen, and the annual turnover is approximately 15 billion Danish kroner.
Profit after tax was DKK 528. 0 million compared with DKK 418. 4 million in 06/07. The increase in profit of DKK 109. 6 million is due to an EBIT increase of DKK 118. 4 million. Financial items, which mainly consist of interest expenses to JYSK Holding A/S, remain largely unchanged. Profits are regarded as satisfactory and are better than anticipated.
Net turnover rose from DKK 6. 6 billion to DKK 7. 7 billion which is equivalent to an increase of 15. 9%. Profit in Denmark has decreased slightly, which should be seen in the context of rising distribution and operational costs at our distribution centre in Vejle as a result of capacity issues which are only expected to be resolved when the new warehouse in Uldum is fully operational. Earnings in the store network have shown a slight increase. Falling profits in Sweden are related to large investments in the store network with an extraordinary amount of activities.
We have again achieved profit increases in Poland and the Czech Republic which means that profits are now at a satisfactory level. The two countries have 100 and 46 stores respectively which has resulted in a high recognition level for JYSK among consumers. For the first time we have achieved a modest profit after tax in Hungary despite very difficult market conditions. Slovakia has seen a decent profit increase after the small profit achieved in the company’s first year of operation. Finland realised a decent profit increase so that it is now seeing a profit for the second year running.
Finnish profits are the best since JYSK opened there, but profits are still not satisfactory. Loss-making countries now include the Netherlands, as well as Slovenia and the UK, two countries in which we have just opened. The losses in these three new countries were anticipated. In this financial year, 58 new shops were opened net compared with 65 in the previous financial year. Expansion has primarily taken place in Poland, the Czech Republic, Hungary and the Netherlands. Capital and reserves Capital and reserves have risen from DKK 1,139. 1 million to DKK 1,429. 6 million. This includes a proposed dividend of DKK 370. 8 million.
Continued increase in turnover Profit after tax was DKK 253. 9 million. compared with DKK 266. 5 million the previous year. EBIT has fallen from DKK 346. 8 million to DKK 337. 4 million in 07/08. Denmark Net turnover has increased by 3. 0% and we have opened three new stores during the year which means that Denmark had 93 stores by the end of the financial year.
Denmark has seen an increase in its gross margin which is mainly due to improved purchasing agreements. However, the increase has not made an impact on the bottom line due to the rising costs of distribution and operations at the distribution centre in Vejle. We have also experienced additional costs in the store network in the form of the relocation and restructuring of several stores as well as the additional purchase of fixtures and equipment for furniture exhibitions, among other things.
Inventories have risen from DKK 612. 2 million to DKK 676. million, which is due to an increased focus on the ability of our distribution centres to deliver to the stores. This has meant increased costs at the distribution centre, but has also resulted in improved campaign readiness in-store. Over the year, we have invested approximately DKK 170 million in the new distribution centre at Uldum, primarily in equipment. The investment in the warehouse building is defrayed by JYSK Holding A/S. The warehouse is expected to be fully operational during the 08/09 financial year.
Profit after tax has fallen from SEK 54. 8 million to SEK 44. 6 million in 07/08. EBIT has fallen from SEK 134. 4 million to SEK 118. 0 million. Sweden This decline is the result of a combination of the increased costs involved in restructuring and upgrading stores, offset by an increase in turnover of 6. % as well as an increased gross margin as a result of improved purchasing agreements.
Fuel costs rose in 07/08 which in turn meant that distribution costs from our distribution centre to the stores rose more sharply than expected. In addition, we introduced a change to the accounting policy, which means that a larger proportion of the costs of relocating and renovating stores is directly allocated to operations. This amended policy had a negative effect on profits of approximately SEK 9 million in 07/08. At the end of the financial year, the company had 120 stores, including a small Internet store.
One store opened during the past year and two were closed. The best result ever Profit after tax has increased from NOK 78. 3 million to NOK 103. 6 million in 07/08. EBIT has risen from NOK 108. 0 million to NOK 137. 2 million.
Profits were negatively affected by approximately NOK 10 million due to a change in capitalisation policy, which means that a larger proportion of investments are allocated directly to operations. The increase in profit is due to a rise in turnover of 10. 0% and higher gross margins. The increased gross margin is due to improved purchasing agreements. Distribution costs in relation to deliveries from the distribution centre in Vejle remain at a high level – which is partially due to high oil prices. Last year’s expectations of a price reduction have only partially been met and our primary carrier has been replaced during the year.
Three stores net were opened during the financial year 07/08 so that the total number of Norwegian stores stood at 68 at the end of the year. Profit was EUR 2. 2 million compared with EUR 0. 4 million the previous year. EBIT was EUR 2. million compared with EUR 0. 7 million in 06/07. Profits are the best so far achieved on the Finnish market, but profit levels remain unsatisfactory. Finland Increased profits are mainly due to an increase in turnover of 15. 5% and a certain improvement in gross margin.
The company had 53 stores at the end of the financial year. One store opened during the past year. Improvement in profit and 100 stores Profit after tax was PLN 54. 1 million compared with a profit of PLN 24. 9 million in the previous financial year. EBIT improved from PLN 35. 0 million in 06/07 to PLN 74. 8 million.
Increased profits are mainly due to higher turnover in existing stores, raised gross margins through improved purchasing agreements, and adherence to strict cost management. The introduction of the new distribution centre in Radomsko has progressed satisfactorily and costs have been in line with expectations.
The company opened 11 stores during the financial year and had 100 stores at the end of the year. The financial result was a profit after tax of CZK 100. million compared with a profit of CZK 23. 8 million last year. EBIT improved from CZK 46. 3 million to CZK 138. 4 million .
The improved financial result is due to an increase in turnover of approximately 40%, a rise in gross margins and continued falling cost ratios in all major areas. Thirteen stores opened during the year which means that there were 46 stores at the end of the year. This is the highest number of new openings ever in the Czech Republic in one financial year.
The financial result was a profit of HUF 3. 0 million after tax compared with a loss of HUF 188. 0 million the previous year. EBIT improved from a loss of HUF 140. 3 million to a profit of HUF 150. 4 million. The company has thereby achieved a modest profit in its third full year of operations.
This is a positive result, considering the financial crisis in Hungary with the resulting increases in taxes and duties and negative trends in consumer spending. Eleven stores opened during the year, meaning that the company had 38 stores at the end of the year. The profit achieved was affected by the costs of opening new stores. The reason for the decline is primarily the opening of seven stores with their associated nonrecurring costs and the effect of one store in Amsterdam being destroyed by fire. Turnover has also been poorer than anticipated.
The decline in profit was largely expected, but it was exacerbated by weaker turnover. The company had 22 shops at the end of the year. This increase was mainly due to a continued satisfactory growth in turnover combined with relatively low cost levels. The company opened four stores during the financial year and had nine stores at the end of the year. The two new countries JYSK Ltd. (United Kingdom) The financial result in the UK was a loss after tax of GBP 1. million. This loss was due to the start-up costs for four new stores and a market with weak sales growth and high rental costs.
The market is generally characterised by several retail chains in crisis, which has not yet affected rental levels sufficiently. Lars Larsen attended the United Kingdom launch when the first stores opened their doors on 4 April 2008. JYSK d. o. o. (Slovenia) The financial result in Slovenia was a modest loss after tax of EUR 0. 2 million. Two stores were opened which have achieved higher turnover than anticipated.
It has proven difficult, however, to find suitable premises which is why expansion in Slovenia has been slower than expected. JYSK was well-received by the Slovenes when the first stores opened on 10 April 2008.
Expectations for the 08/09 financial year JYSK Nordic is expected to achieve only minor growth in profit in the 08/09 financial year due to the current financial crisis affecting most markets. It is expected that JYSK will fare relatively well against its competitors and the signs of crisis seen in various countries will affect JYSK less than its competitors.
The number of new stores opening is expected to remain unchanged compared with 07/08. Store openings are planned in Croatia in autumn of 2009. JYSK Nordic will start using its new distribution centre in Uldum in 2009. In the same year, our distribution centre in Radomsko, Poland, will be expanded. JYSK Nordic is also looking forward to 2010 when we plan to open our first stores in China.
In addition to concentrating on treating our suppliers, customers and staff responsibly, we have re-evaluated our vision and mission for JYSK Nordic’s 11 countries over the past year and we have added Customer Values and JYSK Leadership. Mission We have collected our general thoughts on the future of JYSK to create our mission statement and vision. This is because we want to give our customers more than just a great bargain in terms of price. Our entire concept should radiate a great bargain. Our stores must be located close to our customers, our advice should be better than that of our competitors and it should be easy to shop at JYSK.
Customer values and leadership To retain the right focus on customer advice we have created our Customer Values, with keywords such as ‘credible’, ‘simple’ and ‘responsible’. We have also developed JYSK Leadership to ensure that we retain a direction for the development of managers at all levels and in all countries. Here our watchwords are ”leader”, ”coach” and ”communicator”. Find out more about our vision, mission, values and leadership at JYSK. dk. New distribution centres Our growth requires management – and logistics.
The expansion and construction of new distribution centres form a natural part of our growth. We will start using Scandinavia’s largest distribution centre in Uldum in 2009. In the same year, we will also commence a major expansion of our distribution centre near Radomsko, Poland. Bigger and better stores In the 07/08 financial year our customers have seen that we are serious when we talk about our desire for an easy and accessible concept. We have invested heavily in upgrading stores in our ‘old’ countries such as Denmark and Sweden in the past year which has pleased both staff and customers.
Some stores have moved to larger and more contemporary premises while others have been renovated. JYSK will continue to focus on more efficient stores in the years to come. Management With stable operations in all 11 JYSK Nordic countries, the past financial year really stands out. The management teams in these countries are able to perform most of their tasks themselves which has quelled any concerns about operations and has increased our overall focus on sales.At headquarters, a Retail Director, an HR Director and a Sales & Controlling Director have joined the management team.
Larsen started his JYSK adventure in 1979 when he opened his first store. Today JYSK has stores in 32 countries – with more being added all the time. Next year JYSK Nordic will be represented in 12 countries. JYSK has become a well-known group of companies and the fact that JYSK is part of daily life for thousands of people means that the group has obligations. Corporate Social Responsibility (CSR) is high on our agenda.
We come into contact with thousands of customers every day and responsibility and credibility are therefore the two mainstays in the way we do business. Our employees expect their workplace to take responsibility. And the rest of the world also expects – and rightly so – that companies care about the world they are part of. At JYSK we believe that CSR means taking responsibility for our products as well as their production and manufacture. JYSK must also be a responsible employer and help to ensure that our business partners are also responsible to their employees.
CSR is difficult to work with and the work is never finished. It is a continuous process where new areas and methods constantly appear on which we need to take a stand. JYSK is a large company – and we are not naive: Sometimes we will be attacked for our ethics – that is the way it is when you are a global player. We regard our dialogue with the world – whether it be praise or criticism – as part of a learning curve. We experience increased understanding from our surroundings about the complex issues we face when we do business globally.
We are affiliated with the FTA, Foreign Trade Association, and the BSCI, Business Social Compliance Initiative. We are very pleased that the number of member companies in the BSCI in Europe now stands at over 200. We form a stronger front in the industry by defining common standards and having the same objectives. We are co-founders of the TFT, Tropical Forest Trust, which invests in a targeted manner in forested areas and factories that live up to the most stringent social and environmental standards.
JYSK sells FSC-certified garden furniture, which guarantees that the wood originates from responsible forestry and that it was grown and felled in consultation with local people so that overexploitation of the natural environment is avoided. In Denmark we are represented on the Council for Sustainable Business Development. Through our Code of Conduct, contracts, checks, workshops and partnerships with our suppliers, we can contribute to developments and help to push them in a more responsible direction. Change does not happen overnight.
But neither does it come from turning your back on the problems. Only if we get involved, can we help to move things in the right direction. Sponsorships and donations Next year JYSK Denmark will have been the main sponsor of the DHIF (the Danish Disabled Sports Association) for 20 years. JYSK is also the main sponsor of the disabled sports associations in Norway and Sweden and JYSK Franchise supports disabled sports in Canada, Lithuania, Latvia and Estonia, as well as Iceland and the Faroe Islands. Disabled sportspeople are an inspiration to others, using their willpower to get results.
They show that if you want something enough, you can do it. Lars Larsen and his family have followed the Danish athletes closely all these years. Once again this year, we have sold special products in support of the ‘Support the Breasts’ campaign in Denmark of Kr? ftens Bek? mpelses (a Danish cancer charity). The campaign is seeing increasing awareness and we are happy to be able to contribute to the cause in our 93 Danish shops.
JYSK Nordic is the main sponsor of the disabled sports associations in the three Scandinavian countries. At this year’s Paralympic Games in China, the Danish, Swedish and Norwegian athletes won a total of 28 medals. Danish athlete Jackie Christensen won gold in the shot put and silver in the discus.